Business News
Continued growth despite weaker markets
Monday 18. August 2008 - First-half 2008 results: Consolidated sales: +60% to 1,085.8 million EBITDA: +68% to 156.4 million EBIT +68% to 100.0 million
The full-year outlook remains positive
Acquisitions and divestments
Constantia Packaging, a leading Austrian industrial corporation, recorded strong growth across all business segments in the first half of 2008. Along with successful acquisitions and divestments in the first two quarters of 2008, the completion of the AMAG acquisition in the fourth quarter of 2007 was among the main growth drivers. AMAG is a leading European supplier of specialty premium aluminum products.
Consolidated sales up 60%
First-half sales rose to 1,085.8 million, up 60% from 680.4 million in 2007. EBITDA growth outpaced that of sales, rising by 68% from 93.2 million to 156.4 million. The first-half EBITDA margin improved from 13.7% to 14.4%. Operating income (EBIT) totaled 100.0 million, up 68% from 59.5 million in the first half of 2007. The operating margin stood at 9.2%, up from 8.7% in the first six months of the previous year. Pretax income (EBT) amounted to 77.9 million, compared with 54.3 million in the first half of 2007. Consolidated net income (excluding minority interests) totaled 46.3 million, up from 30.5 million.
Continued longterm growth -Concentration on growth markets “We are focusing on markets where we expect steady growth in demand for our products thanks to demographic trends and rising living standards,” commented Hanno M. Bästlein, the Chief Executive Officer of Constantia Packaging AG. For the full year 2008, Constantia Packaging AG expects the Group to record significant sales and earnings gains in markets that are stabilizing at a high level.
Results in detail
Consolidated sales up 60% to 1,085.8 million
Consolidated first-half sales rose by 60% from 680.4 million in 2007 to 1,085.8 this year. This growth was largely driven by the first-time consolidation of AMAG following the completion of the acquisition in the fourth quarter of 2007 along with other successful acquisitions and divestments made in the context of ongoing business portfolio optimization. Divestments included H & N Sport GmbH (annual sales: 6 million) at the beginning of the year as well as Danapak Flexibles UK Ltd. (annual sales: 14.7 million) and Chicago-based Multifilm Inc. (annual sales: 7.5 million) in April, the latter through a management buy-out. In May, Constantia Packaging AG acquired a 70% stake in Teich Aloform GmbH, which is based in Werdohl, Germany and had 2007 sales of 28.8 million. In June, Constantia became the sole shareholder in Duropack AG by acquiring the remaining 40% minority interest held by Smurfit Kappa. Through the acquisition of a 24.7% stake in Belisce d.d., a leading Croatian producer of corrugated board and base paper, Constantia aims to further enhance its longstanding and successful collaboration with this company.
EBITDA +68% to 156.4 million
EBITDA growth outpaced that of sales, rising by 68% from 93.2 million to 156.4 million. The first-half EBITDA margin improved from 13.7% to 14.4%.
EBIT +68% to 100.0 million
Operating income (EBIT) totaled 100.0 million, up 68% from 59.5 million in the first half of 2007. The operating margin stood at 9.2%, up from 8.7% in the first six months of the previous year. Pretax income (EBT) amounted to 77.9 million, compared with 54.3 million in the first half of 2007. Consolidated net income (excluding minority interests) totaled 46.3 million, up from 30.5 million.
Cash flow: 91.2 million
Investments: 50.1 million
First-half operating cash flow more than doubled from 42.8 million to
91.2 million. Investment totaled 50.1 million in the first half of 2008, up
from 46.6 million the previous year.
As of June 30, 2008, the equity ratio was 25%, down from 27% on
December 31, 2007. Net debt was 717 million (compared with 602
million on December 31, 2007), with the increase due primarily to the
acquisition of Teich Aloform GmbH, Germany, the 24.7% equity
investment in Belisce d.d, and the buy-out of the 40% minority interest in
Duropack AG. In July 2008, an underwriting agreement was signed with
an Austrian bank for a 250 million profit participation bond. Given the
bonds deep subordination and perpetual maturity, the funds are
treated as equity under IFRS. This securities issue will increase the equity ratio to
more than 40% by end-2008 and thereby significantly reduce Constantia
Packaging AGs gearing. As of June 30, 2008, there were 8,417
employees, compared with 7,255 the previous year.
Umsatzverteilung: 38%-16%-46%
Das Segment Aluminium trug 38 % zum Konzernumsatz des ersten
Halbjahres 2008 bei, das Segment Wellpappe 16 % und das Segment
Flexible Verpackung 46 %.
Segment sales contributions: 38%-16%-46%
The first-half sales contributions from the respective business segments
were as follows: Aluminum 38%, Corrugated Board 16% and Flexible
Packaging 46%.
First-half Aluminum segment sales totaled 423.4 million. EBITDA
totaled 65.7 million, providing a 15.5% margin. Operating income (EBIT)
totaled 44.2 million, and the operating margin was 10.4%. Investments
totaled 14.0 million, and the number of employees as of June 30, 2008
was 1,284.*
The Corrugated Board segments first-half sales rose by 10% from
158.1 million in 2007 to 174.5 million this year. First-half EBITDA
remained essentially unchanged at 24.1 million, compared with 24.2
million in 2007. The EBITDA margin was therefore 14%. Operating income
(EBIT) was 14.8 million, down 9% from 16.3 million in 2007. This
decrease was due primarily to the loss of a major customer at one
Austrian plant. Although the plant continues to make positive contributions,
a total strategic realignment was initiated that has already begun to show
results. The first-half investment volume was 8.8 million, compared with
8.7 million the previous year. The number of employees as of June 30,
2008 was 2,446, compared with 2,515 the previous year.
Additional positive developments
Flexible Packaging segment sales totaled 518.8 million in the first half, a
slight 1% decrease from the previous years level of 522.9 million. The
segments first-half EBITDA fell by 2% from 73.4 million in 2007 to 72.2
million this year, yielding a 14% EBITDA margin. Operating income (EBIT)
was 46.8 million, down 4% from 48.8 million in the first half of 2007. The
operating margin was therefore 9%. We are combating the effects of rising
commodity prices through ongoing productivity enhancements and the
optimization of suppliers and supplier relationships. Non-recurring
expenses related to the Dedicated Plants project aimed at enhancing
productivity and lowering costs are currently weighing on earnings. The
segments investments totaled 27.2 million in the first half of 2008,
compared with 36.4 million the previous year. The number of employees
as of June 30, 2008 was 4,646, compared with 4,706 the previous year.
Full-year outlook remains favorable
Constantia Packaging is focusing on markets where it expects sustained
demand growth for its products based on demographic trends and rising
living standards. The company will therefore expand its presence in
Central and Eastern Europe as well as select markets in Asia and the
Americas (North, Central and South).
Continued growth
For 2008 overall, we project further strong gains in sales and earnings, as
markets stabilize at high levels.
* Comparisons with the previous years results are not material, given the occurrence of the acquisition in the fourth quarter, the spin-off of the extrusion business and divergent accounting principles under the Austrian
Corporate Code (UGB)